JAMA Forum: What Does it Mean to Protect People with Preexisting Conditions?

As I wrote in the JAMA Forum recently, a lawsuit in Texas had the potential to hand Democrats a politically potent health care issue in this year’s midterm election. That appears to be exactly what has happened.

The lawsuit was brought by a group of Republican state attorneys general, using a novel legal hook to argue that the entire Affordable Care Act (ACA) should be thrown out as unconstitutional. The Trump administration is not defending the ACA in court. Rather, it is concurring with the suit’s underlying legal premise, but arguing that the entire health law should not be invalided, only its protections for people with preexisting conditions.

The judge could rule in the case any day now (though the administration has asked him to delay a decision until after open enrollment in the federal ACA exchange ends on December 15). Even if he sides with the Republican attorneys general or the Trump administration, his decision might be stayed, pending appeal by a group of Democratic attorneys general who have stepped in to defend the ACA. The decision might also be overturned by an appellate court and ultimately the Supreme Court. In fact, a number of legal scholars have poured cold water on the case.

Many Democratic candidates are running advertisements attacking Republicans for threatening coverage for people with preexisting conditions. These ads are targeting not only the lawsuit, but also efforts by Republicans last year to repeal and replace the ACA, as well as the Trump administration’s regulation expanding the availability of short-term insurance plans that do not have to comply with any of the ACA’s consumer protections and will tend to segregate healthy and sick people into separate insurance pools.

In one ad, Democratic Senator Joe Manchin in conservative West Virginia literally shoots a document labeled as the Texas lawsuit.

This has put Republican candidates on the defensive. For example, Josh Hawley, one of the state attorneys general who brought the lawsuit and is now running for the US Senate in Missouri, has run an ad talking about his son’s preexisting condition and vowing to protect coverage.

President Trump recently said he will “always fight for and always protect patients with preexisting conditions,” in spite of the position his administration has taken in the lawsuit.

Pick your metaphor: Protections for people with preexisting conditions are now like motherhood and apple pie, and opposing them is a political third rail. In fact, in a recent Kaiser Family Foundation poll, 75% of the public says it’s “very important” that guaranteed coverage for people with preexisting conditions remains the law, with majority support from both Democrats and Republicans.

But, a challenge for Republicans is that making preexisting condition protections a reality requires a significant amount of government regulation, funding, or both, which historically conservatives have generally opposed.

Insurance regulation is a bit like plumbing. A small leak tends to become a big leak over time. If there’s a loophole in the regulations, some insurer will find it and take advantage of it. That insurer will start to attract healthier enrollees, and other insurers will be forced to follow.

A Senate bill that some candidates have pointed to as evidence of their support for preexisting condition protections is 1 example. The bill would prohibit insurers in the nongroup market from denying coverage to people with preexisting conditions and charging premiums tied to an enrollee’s health. Those rules largely mirror the ACA. However, premiums could vary based on age, sex, occupation, and lifestyle (mountain climbers beware!).

Also, the bill would permit insurers to use “preexisting condition exclusions,” which were common before the ACA outlawed them. In other words, insurers would have to cover people with preexisting conditions, they just wouldn’t have to cover the conditions themselves. That would make coverage of preexisting conditions something of a mirage.

If a proposal claims to offer preexisting condition protections, here are some questions to ask :

Does it guarantee access to coverage irrespective of health?

Does it require community rating, meaning the same premiums for people who are healthy and sick?

Does it mandate a package of required benefits?

Can insurers exclude coverage of preexisting conditions?

Are annual and lifetime limits on coverage allowed?

Also, if insurers are required to cover people with preexisting conditions, achieving a stable market with reasonable premiums needs some mechanism to attract healthy enrollees or to subsidize premiums. The ACA included 2 such mechanisms: a stick in the form of an individual mandate that penalized people without coverage and a carrot in the form of subsidies that make coverage more affordable for lower-income consumers in the individual market. The individual mandate penalty has now been repealed starting next year, but the subsidies remain and are helping to maintain market stability.

Medicaid also plays a big role in covering people with preexisting conditions who have incomes below or just above the poverty level, particularly in states that have opted to expand eligibility under the ACA, providing coverage to an additional 12 million people.

The ACA seems to have shifted the politics of preexisting conditions, making it difficult for candidates to oppose consumer protections—rhetorically, though not always in reality.

###

About the author: Larry Levitt, MPP, is Senior Vice President for Special Initiatives at the Kaiser Family Foundation and Senior Advisor to the President of the Foundation. Among other duties, he is Co-Executive Director of the Kaiser Initiative on Health Reform and Private Insurance. (Image: Ted Grudzinski/AMA)

About The JAMA Forum: JAMA has assembled a team of leading scholars, including health economists, health policy experts, and legal scholars, to provide expert commentary and insight into news that involves the intersection of health policy and politics, economics, and the law. Each JAMA Forum entry expresses the opinions of the author but does not necessarily reflect the views or opinions of JAMA, the editorial staff, or the American Medical Association. More information is available here and here.